Canadian breach costs continue to climb, and “shadow AI,” unsanctioned or ungoverned AI tools, is now a measurable driver. IBM’s 2025 data shows Canadian organizations paying an average of CA$6.98M per breach, with unsanctioned AI emerging as a risk factor. Meanwhile, CIRA’s national survey found widespread ransomware impact across organizations.
As a Canadian provider, we align our programs to the Canadian Centre for Cyber Security (CCCS) Baseline Controls, the practical “80/20” of controls SMBs can actually implement. That’s the blueprint beneath everything below.
What we mean by “shadow AI” (and why blocking isn’t enough)
“Shadow AI” covers any AI service, browser plug‑in, or SaaS feature employees use without governance, pasting customer lists into a chatbot, letting plug‑ins read mailboxes, connecting OAuth apps to Microsoft 365, or exporting source code for “review.” If you’ve only blocked a few domains, you haven’t fixed OAuth app consent, data loss prevention (DLP), browser extensions, or supply‑chain add‑ons. That’s where real risk hides.
The 010grp 30‑Day Shadow AI Lockdown (Microsoft 365–first)
We’ve built and run these controls across Ontario and beyond. If you want a broader foundation first, read our opinionated 30‑day plan Canadian SMBs can actually execute, then come back to enforce the AI‑specific layers.
Week 1: Discover & set policy
- Inventory AI use: enable auditing and Cloud App Discovery (Defender for Cloud Apps) to fingerprint AI tools and SaaS add‑ons in use. Map which business units paste what data where.
- Define an AI Acceptable Use Policy: permit safe tasks (summarizing public docs), prohibit pasting personal or confidential data, and require usage via sanctioned accounts only. Tie this to your cyber security strategy and technology strategy.
- Classify data: at minimum, label personal information (PIPEDA), Québec data (Law 25), financial records, IP, and regulated datasets. This unlocks policy‑based DLP in Week 3.
Compliance note: if you handle personal information, PIPEDA requires breach record‑keeping and notification when there’s a “real risk of significant harm.” Québec’s Law 25 imposes stricter privacy duties and individual rights — your AI policy must align.
Week 2: Identity guardrails (close the front door)
- Lock down OAuth consent: disable end‑user app consent; move to admin approval workflows with an allowlist for approved AI apps and plug‑ins.
- Conditional Access: require strong MFA, device compliance (Intune), and session controls for any app that can touch sensitive data. Block legacy/basic auth outright.
- Harden browsers: allowlist extensions; block clipboard‑sync apps; force corporate profiles. Push policies via Intune across Windows/macOS.
- Tie it to operations: our MSP management and network security services bake these guardrails into daily admin, not “best‑effort.”
Week 3: Data loss prevention & egress control
- Policy‑driven DLP (Microsoft Purview): block uploads of labeled data to unsanctioned AI domains; warn on attempted prompts containing personal information; auto‑label files leaving trusted locations.
- App governance in Defender for Cloud Apps: block or sanction AI services; monitor risky OAuth scopes; alert on mass‑download → prompt‑paste sequences.
- Segregate workspaces: employees use sanctioned AI with corporate identities; personal accounts are blocked from corporate data entirely.
- Backups and recovery: pair controls with immutable, tested backups so prompt‑driven mass deletion or sync corruption isn’t existential. Our backup as a service covers Microsoft 365, servers, and critical SaaS.
Week 4: Detect, respond, and prove it
- Centralize telemetry: stream Entra ID (Azure AD), Defender for Cloud Apps, Purview DLP, and M365 audit logs into a SIEM. Our managed SIEM hunts for high‑risk AI patterns (sudden OAuth grants, unusual egress, prompt‑paste spikes).
- Table‑top and drill: run AI‑specific incident scenarios (e.g., contractor pastes customer list into a public chatbot). Validate breach assessment steps, Law 25 requirements for Québec data, and PIPEDA record‑keeping.
- Attest & align: document how your controls map to the Canadian Baseline Controls. Financial services? Be ready to show how the stack supports OSFI Guideline B‑13 expectations on technology and cyber risk management.
Myth‑busting
- “If we block ChatGPT, we’re safe.” False. Shadow AI lives in plug‑ins, mobile apps, browser extensions, and OAuth add‑ons. Govern identity, not just domains.
- “DLP is too heavy for SMBs.” Not if you start with labeled personal data and 4–5 high‑value rules, then iterate. That’s the CCCS 80/20 philosophy in action.
- “Our insurance will cover it.” Policies increasingly expect concrete controls (MFA, backups, logging). Prove you run them continuously.
Exactly what we implement (so you don’t have to guess)
Within our cyber protection services, we package the above into a turnkey program: Microsoft 365 and Intune hardening, app‑consent governance, DLP policies, SIEM detections, and recovery testing backed by 24/7 operations. For broader context, see: cybersecurity best practices for 2025, all the solutions in one place, and manufacturing‑specific guidance on supply‑chain cybersecurity.
Talk to us and protect your customers and your business.
